Hurricanes and Insurance

[Carl in Tampa]

No hurricane has directly struck the State of Florida in eight years.

In view of that, Why is my homeowner's insurance premium, which was raised after Hurricane Charlie struck southwest Florida in 2004, still so high?

:cus:

(Rhetorical question.............just wanted to vent.)

[CFrance]

No hurricane has directly struck the State of Florida in eight years.

In view of that, Why is my homeowner's insurance premium, which was raised after Hurricane Charlie struck southwest Florida in 2004, still so high?

:cus:

(Rhetorical question.............just wanted to vent.)
Because they can.:swear:

[mulligan]

Because when the hurricanes last hit several areas of Florida ( think Andrew and Katrina), the subsequent claims just about wiped out several insurance companies. The bigger the $$ pool available for the next one, the better chance for their survival.

[Carl in Tampa]

Because when the hurricanes last hit several areas of Florida ( think Andrew and Katrina), the subsequent claims just about wiped out several insurance companies. The bigger the $$ pool available for the next one, the better chance for their survival.

Andrew was south of Miami in 1992, but Katrina (2005) was New Orleans, not Florida. Were you thinking of Charlie, which hit SW Florida in 2004?

There must be some kind of cap on how large a money pool the insurance companies are allowed to build up. And why must it all come from premiums of Florida homeowners who haven't had major hurricane claims in almost a decade?

Not only are my premiums higher, so are my deductibles.

And, in addition, the principal insurers have set up a system where they "hedge" their risk liability by reinsuring a part of their risk with other companies.

The rates and deductibles need to be adjusted downward to reflect the claims experience of the past ten years.

[mulligan]

Don't tell the people in Spring Hill that Katrina didn't hit Florida.

[ilovetv]

Citizens' state-subsidized insurance policies being converted back to private insurers has to be affecting prices.

Property-owning taxpayers pay for it either way.... a) subsidizing Citizens' policies; or b) higher premiums to private insurers

"It's all part of the aggressive and controversial push by Gov. Rick Scott and the Florida Legislature to shed Citizens Property Insurance of its 1.2 million state-subsidized policies. Under current law, if Citizens falls short of the cash it needs to pay its claims after a massive storm, policyholders of other lines of insurance and state taxpayers will be assessed fees to foot the bill.

But as Citizens shifts policies to the private market, the bottom line for homeowners is that costs will rise. Private companies don't face the same rate caps as those imposed on Citizens and they don't benefit from the taxpayer-backed system."

As Citizens sheds policies, Florida homeowners face tough choices | Tampa Bay Times (http://www.tampabay.com/news/business/banking/as-citizens-sheds-policies-florida-homeowners-face-tough-choices/2140756)

[Carl in Tampa]

Don't tell the people in Spring Hill that Katrina didn't hit Florida.

Well, ya got me................sort of.

I had forgotten that Katrina winds affected South Florida. However, technically at that time it was Tropical Storm Katrina and didn't become a hurricane until it got out in the Gulf waters.

The big damage was, as I said, from Andrew and Charlie.

The post about Citizen's Insurance made me realize why my premiums remain so high.

[BogeyBoy]

Eight of the 10 most expensive
hurricanes ever to make landfall in
U.S. history have had at least some affect
on Florida, causing in excess of $60 billion
(constant 2005 dollars) in insured losses
(hurricanes Andrew 1992, Charley, Frances,
Ivan and Jeanne in 2004, and Katrina,
Rita, and Wilma in 2005).

On a side note, I lived in Naples 2004-2005, bad choice of years to live there. Unless you have witnessed the destruction first hand you can't believe what a mess is left behind.

[Carl in Tampa]

Eight of the 10 most expensive
hurricanes ever to make landfall in
U.S. history have had at least some affect
on Florida, causing in excess of $60 billion
(constant 2005 dollars) in insured losses
(hurricanes Andrew 1992, Charley, Frances,
Ivan and Jeanne in 2004, and Katrina,
Rita, and Wilma in 2005).

At the same time, no hurricane has made landfall in Tampa Bay in ninety-three years.

In addition, my home is located on a high inland ridge where emergency relocation shelters are located, far from tidal surge areas.

Shouldn't actuarial tables take this into account when setting insurance rates on my Tampa home?

[JourneyOfLife]

I suspect the cost of living in Florida is going to get more expensive in terms of insurance cost. Plus, the insured will end up shouldering more of the risk (out of pocket costs when claims are filed) and have severe limitations and restrictions.

Here is an interesting POV about the Citizen's move to offload some of thier risk.

Expert FAQ: How Will Depopulating Citizens Insurance Affect Florida? | NerdWallet Insurance (http://www.nerdwallet.com/blog/insurance/2014/04/14/expert-faq-depopulating-citizens-insurance-affect-florida/)

I thought the last part was interesting.... looks like second home owners and tourist might be the initial targets.

However, balancing the economic and environmental needs of Floridians and their state is no easy task. At minimum, it seems Citizens must delay policy transfers on primary residences and more carefully screen alternative insurers. But leaving the state’s businesses and coastal tourists to pick up all the slack also puts the state in a precarious economic position.

Unfortunately for Florida, there are no easy answers.


It isn't just home insurance... that latest change on auto insurance is not very consumer friendly either!